Bitcoin’s recent surge has hit a significant technical and on-chain resistance area, with Julio Moreno, head of research at CryptoQuant, cautioning that multiple indicators indicate a heightened risk of correction following a steep rebound from the lows in April.
Reasons Behind Increasing Correction Risk for Bitcoin
Moreno noted that CryptoQuant had been signaling a potential pullback for several weeks, highlighting factors like high unrealized profits, a surge in profit-taking across both spot and futures markets, a slowdown in US spot demand, and resistance at key technical and on-chain price levels. Their latest analysis suggests that Bitcoin’s approach to the 200-day moving average will be a crucial test for the sustainability of the rally, determining whether it has solid support or is simply a bear-market bounce losing steam.
CryptoQuant emphasized that Bitcoin has hit a significant bear market resistance level at the 200-day moving average, currently around $82.4K, following a 37% price increase since April’s lows. This situation parallels the events of March 2022, when Bitcoin similarly experienced a 43% rally before confronting the 200-day MA, after which prices resumed their downward trend. This context raises concerns about the possibility of similar outcomes.
The resemblance to the situation in March 2022 is pivotal in CryptoQuant’s caution. They assert that the 200-day moving average functions not merely as a technical indicator but as a zone where previous bear-market rallies have faltered due to weak demand and significant profit-taking. The recent 37% increase from the lows in April brings the market back to a similar critical juncture.
A major concern is the rise in unrealized profits among traders. CryptoQuant revealed that unrealized profit margins for traders peaked at 17.7% on May 5, marking the highest level since June 2025. Such profitable positions can entice holders to sell, particularly as the rally nears a widely recognized resistance level.
The firm also noted the negative shift in the Coinbase Bitcoin Price Premium, which dropped below zero in late April as Bitcoin approached $80,000, indicating a decline in US investor interest. The lack of a sustained positive Coinbase premium is interpreted as a sign that current bullish movements may lack the necessary institutional backing for lasting momentum.
If a corrective phase occurs, CryptoQuant identified a key on-chain support level at around $70,000, represented by the Traders’ On-chain Realized Price. Historically, this level has served as a resistance-turned-support point in bear markets, reflecting the average cost basis for short-term traders. As of now, Bitcoin is trading at $76,961.
